ECONOMIC REPORT OF THE PRESIDENT

to alleviate hunger by supplementing the food budgets of low-income
households. SNAP is broadly available to most low-income households,
with eligibility based primarily on income and assets. Over 45 million
Americans, including almost 7 million children under the age of 5, received
SNAP in FY 2014, as well as the elderly, working families, and individuals
with disabilities.
Eligible households generally must have a gross monthly income
below 130 percent of the official poverty guideline for their family size and
a net income that falls below the poverty line (USDA 2015). SNAP benefits
are distributed to eligible households on a monthly basis in the form of an
electronic benefit transfer (EBT) card, which can be used to purchase eligible
foods at authorized retail stores. The level of SNAP benefits is intended to fill
the gap between a household’s cash resources that are available to spend on
food and the amount needed to purchase a nutritious diet at minimal cost.
The latter amount is calculated using a model-based market basket of foods
known as the Thrifty Food Plan (TFP), which is adjusted for household size
but not for other factors such as local prices. The benefit formula assumes
that households can contribute 30 percent of their net income to purchase
food. A household’s SNAP allotment is thus equal to the TFP-based measure
of need, which gives the maximum allotment for that household’s size, less
30 percent of the household’s net income.
SNAP plays an important role in reducing poverty in the United States
and has been shown to be highly effective at reducing food insecurity. In
2014, SNAP benefits directly lifted at least 4.7 million Americans, including
2.1 million children, over the poverty line. Research has also shown that,
among households who receive SNAP, food insecurity rates are up to 30
percent lower than they otherwise would be, with impacts for children that
are at least this large (Council of Economic Advisers 2015c).
A growing body of high-quality research shows that SNAP and its
functionally similar predecessor, the Food Stamp Program, have led to
significant improvements in the health and wellbeing for those who receive
food assistance as young children. Almond, Hoynes, and Schanzenbach
(2011) study the impact of the early Food Stamp Program on birth outcomes
by studying the initial rollout of the program across US counties between
1961 and 1975. Using county level variation in the timing of implementation,
they find that a mother’s access to Food Stamps during pregnancy led
to increased birth weight, with the greatest gains at the lower end of the
birth-weight distribution.
Related recent work uses similar cross-State variation and longitudinal
data on children who received food stamps before birth and in the
first few years of life, following them throughout their adolescence and into
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